A scheme should be set up to allow diesel car owners to trade in old models for cash, according to the chairman of an influential Commons committee.
MP Neil Parish is expected to suggest the idea in the House of Commons next week in a bid to tackle harmful emissions.
To qualify, car owners would be means tested and would have to live in a pollution hotspot.
Diesel vehicles were originally promoted by Tony Blair's government as being cleaner than petrol engines.
However, new research suggests high levels of nitrogen dioxide in diesel fumes can cause health problems.
Hafodyryns Road in Caerphilly, South Wales, is the most polluted street in the UK outside London.
Resident Martin Brown said: "We are living in a prison. It is impacting on our health.
"There is traffic from every morning until late at night. It is just horrendous. I have been living here 48 years and it just gets worse and worse.
"I think they should knock these houses down under a compulsory purchase order."
Oliviero Davis, who also lives in Caerphilly, owns an older diesel model.
He told Sky News: "Diesel is cheaper to produce than petrol, but they put the price up once and they knew that people were using it and now they are even reneging on that.
"I think a lot of people would go for a scrappage scheme because my car is worth nothing now. To me personally, it is worth a lot, but it's not worth any money."
There are around 11.2 million diesel cars on Britain's roads. The oldest, most polluting vehicles produce 15% of all harmful emissions.
However, Mr Parish will argue that a half-a-billion pound scrappage scheme on 2005 and older model cars could take nearly 10% of the five million dirtiest diesel vehicles off the roads.
He said: "My scheme is a combination of both postcode and also perhaps linked to income as well, as what you don't want to do is just take everybody's older diesel cars off of the road if many of those people could have afforded to do it themselves without the taxpayer's expense.
"We're looking at whether (diesel cars) could be traded in for an electric car, a hybrid car - or possibly even travel vouchers in order to use public transport.
"The Government should be putting aside around £50m-£100m for this sort of targeted scrappage scheme."
The last scrappage scheme in 2009 offered drivers a £2,000 trade-in on a new car.
Gordon Brown pushed it hard. However, many went on to buy diesel vehicles because at the time they were promoted as being cleaner.
Theresa May has said that would be taken into account in any future plans.
Peter Williams from the RAC told Sky News: "Tackling poor air quality shouldn't simply be about demonising diesel cars; it needs a rounded, strategic approach encompassing all sectors contributing to the problems including construction, the domestic energy sector and other modes of transport, alongside the road transport sector.
"Incentives need to be in place to encourage owners of older vehicles to switch to newer, cleaner models."
Eight years ago, 400,000 old polluting cars were sent to the crusher.
If the Government brings in another initiative then 50,000 more could end up going the same way.